HM2022: Impact of Aesop's Structure on Innovation and Performance

This report examines the organizational structure and innovative strategies of Aesop, a luxury skincare brand, and their impact on management innovation and overall business performance. The report provides an overview of Aesop's structure, strategies, and historical development, highlighting the company's evolution from a product-centric to a retail-centric model. It analyzes how Aesop's organizational structure influences management innovation, including product offerings and expansion strategies. The report further assesses the impact of the company's structure on business performance, emphasizing the importance of design, flexible working environments, and employee development. Recommendations are provided for improving innovation and performance, such as fostering a high-performance culture, enhancing product and service offerings, and empowering employees. The report concludes by emphasizing the critical role of organizational structure in driving innovation and achieving long-term success.

Management
HM2022
Student’s name
9/24/2019

Management 1
Executive Summary
This report mainly highlights about the structure and the innovative strategies of the business,
which further helps them in in improving their overall performance in long term. Moreover, it
carries information about AESOP the well-known company who deals in luxury skin care
products that deals in hair, skin and body care products. Further, this report also states that the
structure of organization has a major impact over management innovation as well as business
performance in long run. So for that certain recommendation are made for AESOP such as,
maintaining good culture within organization, flexible working environment, thinking for more
innovative ideas, in terms of enhancement of the product offerings, service offerings , in their
structure and design. As such aspects helps in attracting more of customers and due to this, the
company will be further able to improve its overall performance, within activities and overall
success in this particular sector or field.

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Contents
Introduction......................................................................................................................................3
Section 1..........................................................................................................................................3
Overview of the company organizational structure, strategies, and possible reasons.................3
Section 2..........................................................................................................................................4
Impact of the companies’ structure on management innovation.................................................4
Section 3..........................................................................................................................................5
Impact of companies structure on overall business performance................................................5
Recommendations for improving innovation and performance......................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
In general, terms it is seen that every organization or an industry strategy is its plan for its entire
business that set out that how the organization will further apply its major resources. In other
words, we can say that every organization strategy carries a specific plan of action or innovative
strategies to fulfill the aim or the specific goals, which was earlier set by them. Similarly, when
we talk about the business structure, it is something, which is viewed separate from strategy. As
revising structure of the organization generally leads to an improvement in efficiency, promote
teamwork, and generate synergy, which helps in generating and building the management
innovation, which further affects the overall performance of the organization at large (Maupin,
2018)
Section 1
Overview of the company organizational structure, strategies, and possible
reasons
When we talk about EASOP Australia, is it one of the luxury skin care brand, which is owned
and controlled by the Brazilian company Natura and co, other than the skin products EASOP
also deals in or produce the hair care products, soaps and perfumes and fragrance. Their main
motto is to offer skin, hair and body care formulations which is generated or created with the
meticulous attention to details and to this, efficacy and sensory pleasure in the mind of an
individuals (Dornelas, Esteves, & Carneiro, 2016)
If we talk about the EASOP history, it was originated in 1987, whose headquarters are in
Melbourne and their various stores and offices in many parts of the world. It was established
with the specific objective such as to rehydrate the formulated skin, hair and body care products
with the finest quality of all. EASOP ingredients are fetch are tried and tested in their
laboratories, which are safely for the further use as it’s a matter of hair, body and skin. Its
competitive aspect is that in their every store there are the consultants who introduce and guide
individuals for what to purchase and what is best suited for their skin. Strategies, which Aesop
creates is the great in, store experience for their customers and also creating unique atmosphere

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at different locations by being inspired by the local culture and environment and much more
which leads to an expansion into additional market to seek to build a truly global brand
(Dornelas, Esteves, & Carneiro, 2016)
Section 2
Impact of the companies’ structure on management innovation
In general, terms when we consider organizational decisions makers, they have the power to
influence innovation with their company through the direct control of the structure of an
organization. As defined organizational structure highlights about the grouping, teams,
coordination and division of tasks amongst departments and employees of the organization.
Further, certain variables are considered when we talk about the structure, such as formalization,
centralization, specialization, functional differentiation, process and culture. Other than this,
when we talk about the innovation aspect, it mainly highlights about the new structure, new
management process, newer policies, newer plans and new programs an processes. Hence,
innovation mainly highlights about the four major aspect, product, process, and marketing and
management.
Similarly, when we talk about the EASOP companies’ structure, earlier they were relatively
small with the turnover around $3 million each year. The companies store was totally based on a
distinctive trade model and further it was labeled as the trader who retailing merchandises all by
itself. Initially company follows the product centric model, for which the company follows the
ads and superstar endorsement and stab to drive clienteles into extensive stores (Noonan, 2006).
Further, the company plan to transform the business by analyzing a changing the design and
appealing of the salon, with this they tried to get connected with the customers and thinks of
altering from the produce centric industry to trade centric commercial. By this, they thought of
changing, the structure and this aspect led them to start their business on the retail basis.
Whereas, with time it was seen that AESOP was majorly focusing over penetration and building
scale with many constraints (Maupin, 2018)
The model, which they were using, was narrow and was not open to many channels. Therefore,
they need transformation to the retail centric model by which AESOP finds the newer

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opportunities in the market to earn better. Along with this and also enhance the product
offerings because they got the direct connection with their ultimate customers which led to direct
attention to the wider expansion through various innovation in their techniques, their product
offerings and the way they were promoting their products (da Silva, et al, 2017)
Further in term of innovation AESOP majorly focused on the niche premium brands, due to this,
AESOP customers internationally exceed in the Australia. Further, innovate ideas which they
join was they mainly focus on the offshore distributers mostly in Asia, and secondly they
targeted the direct market by making direct entry in the retail sector form. In addition, today
when we consider the retail stores of AESOP, it carries 160 supplies everywhere in the creation
and its yields are kept in more than 100 different section storehouses. This has shown that till
date the business has earned or grown-up 40% year to year and its projecting income is of $250
million. Now further in a form of innovation, company is thinking of opening 50 more stores in
the current year.
This shows that the structure of the organization majorly affect the management innovation in
term of expansion, product offerings and reinvent the business model to stay relevant. Hence,
with such though of innovation made the company to think of hitting $1 billion sale by 2025.
Therefore, organizational structure not only led innovation in terms of product by also in term of
management for future. Such as AESOP with its change structure is now thinking of to move in
an engagement centric mode, in which they will connect to each customer at every touch point
which will further help the company to explore, learn , design , innovate, and further expand its
business at large (Boutellier, & Heinzen, 2014)
Section 3
Impact of companies structure on overall business performance
When we talk about the organizational structure, certain set of hierarchy for responsibility is
defined. Other than this, it also creates various levels of communication within an organization
for the effective implementation of the tasks and the set strategies for further improvement in the
overall performance of the organization. It is always sates that organization with its effective
staff or workers has an effective organization structure, and such effective structure leads to an

Management 6
efficient and intelligent decision making which further help the organization to improve its
productivity and raise overall efficiency.
In terms of AESOP structure, the AESOP creative director highlights that they mainly respect
what the designers brings on to the table in which AESOP mainly works over selecting their
designers and architects for the newer location. In the beginning of the design process AESOP
generates the base line for the project, in which people out their respect each other develop a
language over time. In addition, along with this, was respected by the people who work on its
structural aspect. Other than this, AESOP brand grows and evolves, as it tries to reflect in more
in the retail design. Due to these reason the AESOP grows, generates, and affects the overall
performance of the business (Fisk, 2011)
As, due to the great design more people gets attracted and gets affects with the structure of the
AESOP and they tends to visit more frequently and purchase more than usual. Due to this,
companies generate double benefit, such as firstly, they attract more of people due to its design
and innovative aspects. Secondly, they get to know about the customers they wants, desires and
preferences and accordingly they try to innovate in their product offerings so that the company
earn better reputation in term of their design as well as offerings and increasing the overall
productivity of the business (Tungate, 2011)
On a flip side, AESOP main motive is to maintain a strong brand identity in spite of constant
push for the new retail spaces. Other than this, the company is also trying to work over its
operation such as they are focusing on generating flexible working environment, as if when an
organization works with rigidity, the inability of the employees hampers the creativity and
generates future challenges for the organization for expansion and increasing business or
restructuring the organization. As in this concern, AESOP is now majorly forcing on its
innovation aspect and moving online to develop the proper organization culture, which further
helps in AESOP for improving its overall business performance (Pinkhasov, & Nair, 2014)
Other than this, AESOP is now majorly focusing over its hiring ad developing the right people,
right product offering and business operations. Firstly, the company at initial generates induction
as well as training for the employees so that they can also help in improving company as well as
organizational success. Moreover, AESOP is also focusing over developing its own talent, which

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helps in growing an expanding business and along with this; they are sustaining its unique
organizational culture by bringing in creativity, innovation to improve the overall business
performance at large (Fallon, & O'Sullivan, 2014)
Recommendations for improving innovation and performance
According to analysis, AESOP needs to work on building the high performance culture, as
productivity and innovation, which are more likely to thrive organization in forming, shaping
and evolving its culture to align with the company vision, purpose and strategy, which further
helps organization to generate it long term success and improve its productivity in long run. As
ongoing waves of productivity, gains and innovation will be achieved.
Other than this, AESOP needs to think for more innovative ideas, in terms of enhancement of the
product offerings, service offerings , in their structure and design so that they can attract more of
customers and due to this, the company will be further able to improve its overall performance,
within activities and overall success in this particular sector or field.
Other than this, AESOP needs to ensure their employees skills and talents to their full potential
as developing the skills and talent of employees creates win –win condition for the organization
and for the employees. Further, the main head of the company need to focus over the role of
leadership to paint a clearer picture for compelling future organization and its employees. This
basically includes clear and inspiring vision, purpose, strategies and values so proper guidance
which further helps as a key driver for the employee engagement (Sutter, et al, 2015)
Furthermore, for facilitating an effective innovation, offering freedom to the employees is must
because it encourages the innovation. Moreover, offering the control in the hands of employees
and involve them to work without any further involvement always initiates innovation among
employees. Additionally, offering automation can improve the morale among employees and
increases the motivation among employees that increase the innovation. Therefore, for creating
innovation, Aesop needs to follow the organisational culture that can offer automation to
employees (Tungate, 2011)
Lastly, AESOP should work over its product portfolio such as improvement in its product
quality, formulation stability and work over, reducing risk over time. This all can be done when

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AESOP will continuously led and maintain a culture of continuous improvement and keeps
ambition to strive unique, interesting and high quality products, working over its design and
infrastructure, mentoring and giving training to their team members and lastly, AESOP should
design and develop its team structure so that they can support set strategic goals. All these
aspects will help AESOP to win over their competitors and will be able to generate overall
business success in long run (Jelinek, 2018)
Conclusion
From the above report we can conclude that every organization structure generally leads to an
improvement in efficiency, promote teamwork, and generate synergy, which helps in generating
and building the management innovation, which further affects the overall performance of the
organization at large. As this strategic aspect helps the business to grow and leads to expansion
in short time. Similarly, AESOP one of the well-known luxury skin care brand of Australia who
applies innovation and creative techniques for generating success in long term. Further this,
report carries information about the impact of companies’ structure on management innovation
as the companies design patterns impacts the management innovation as old structure affects the
sales, customers visit and overall performance of the organization at large. For that certain
recommendation are made such as, improvement in culture, flexible working condition and more
innovative strategies for improving overall performance of organization at large.

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References
Boutellier, R., & Heinzen, M. (2014) Growth through innovation: Managing the technology-
driven enterprise. Springer Science & Business Media.
da Silva, S. S., de Vasconcellos, E. P. G., Oliveira, M. A., & Spers, R. G. (2017) Critical Aspects
of the Innovation Management: the cases Natura and Oxiteno. International Journal of
Innovation, 5(1), 1-19.
Dornelas, B., Esteves, F., & Carneiro, J. (2016) Natura–The International Expansion of Brazilian
Cosmetics Leader Natura: In Search of a European Scent. In The Challenge of Bric
Multinationals (pp. 317-347). Emerald Group Publishing Limited.
Fallon, L., & O'Sullivan, D. (2014) The aesop approach for semantic-based end-user service
optimization. IEEE Transactions on Network and Service Management, 11(2), 220-234.
Fisk, P. (2011) Creative genius: an innovation guide for business leaders, border crossers and
game changers. John Wiley & Sons.
Jelinek, J. S. (2018) Art as strategic branding tool for luxury fashion brands. Journal of Product
& Brand Management, 27(3), 294-307.
Maupin, M. (2018) The societal and environmental impacts of the skincare industry: a case for
innovation (Doctoral dissertation, Massachusetts Institute of Technology).
Noonan, D. (2006). Aesop and the CEO: Powerful Business Lessons from Aesop and America's
Best Leaders. HarperCollins Leadership.
Pinkhasov, M., & Nair, R. J. (2014) The outlook for luxury. In Real Luxury (pp. 198-221).
Palgrave Macmillan, London.
Sutter, M., MacLennan, M. L., Fernandes, C., & Oliveira Jr, M. (2015) Country of origin image
and foreign markets strategy: Analysis of the Brazilian cosmetics company Natura. Revista
Brasileira de Marketing, 4(3).

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Tungate, M. (2011) Branded beauty: How marketing changed the way we look. Kogan Page
Publishers.